Tuesday’s milestone prisoner exchange does not, repeat does not portend a new peace process between Israel and Hamas. Neither side is even seeking that goal: If the government of Prime Minister Benjamin Netanyahu is unable to agree peace terms with the moderate President Mahmoud Abbas, it’s hardly about to seek a “grand bargain” to end the conflict with the more intractable leadership of Hamas, which Netanyahu sees as a mortal enemy. Hamas, even though its leadership has come to define its immediate goal as establishing a Palestinian state on the 1967 lines,
has no interest in replacing Abbas in a peace process whose terms it has long rejected. Their existential conflict notwithstanding, however, Hamas and Israel may see mutual benefit in a liaison of convenience of the sort seen in the prisoner exchange, in which Abbas was an ineffectual spectator.

Netanyahu came to power in 2009 arguing that there was no prospect for completing the peace process that had been stalled since January of 2001. A grand bargain with the Palestinians simply couldn’t be done, he insisted: Abbas was unwilling or unable to accept Israel’s terms, and he was too weak, politically, to sell any compromise deal to his own people. Abbas’ term of office had expired but he dared not risk new elections; his parliament was actually dominated by Hamas which had won the last vote; and he had no authority in Gaza since his forces were evicted by Hamas in 2007. Rather than seek a political settlement with Abbas, Netanyahu argued, Israel’s focus should be on “economic peace” — easing up on Israel’s stranglehold to allow the West Bank economy to grow and provide a basis for peace at some point in the future. (Gaza would remain under an economic stranglehold until its population was willing to topple Hamas.) While Netanyahu’s logic may have tracked for a time with the efforts of the U.S.-picked Prime Minister Salam Fayyad to build Palestinian institutions — and with Abbas’ hopes of hobbling Hamas — both Abbas and Fayyad insisted that statehood and an end to the occupation remained their key objective.

And while the incoming Obama Administration had tacitly accepted the “economic war” on Gaza, it made clear that Washington expected more than “economic peace” in the West Bank. So Netanyahu went to Plan B, rhetorically accepting the principle of a two-state solution but setting such preconditions as to ensure that Israel would not, in practice, be required to implement it. Abbas has known all along that Netanyahu won’t concede the minimum
necessary for a Palestinian leader to conclude a peace agreement, but he’d hoped the Obama Administration would supply the leverage required to change Israel’s calculations. That illusion was shattered by Obama’s cave-in to Netanyahu on the U.S. President’s insistence that Israel halt settlement construction outside its 1967 borders, as required by President Bush’s 2002 “Roadmap”. Having been left dangling by Obama, Abbas turned to the United Nations, hoping to create negotiating leverage there through establishing international recognition of Palestinian sovereignty over the 1967 territories.

But Hamas had also, for its own reasons, opposed Abbas’ U.N. bid, seeing it as nothing more than an attempt by the Palestinian to boost his own leverage before returning to the same old negotiating table, rejoining a process that, as Hamas spokesman Osama Hamdan put it, “has proved futile over the past twenty years.” Instead, Hamas insists that Abbas operate on the basis of a national consensus achieved via Fatah-Hamas reconciliation, and that the Palestinian focus be on pressuring Israel to end the occupation. A state could only be created once that occupation was ended, Hamdan warned.

The prisoner swap, hailed as a victory for Hamas’ stubborn resistance, has given the organization
a desperately needed bump in its approval rating among Palestinians. Even then, its popularity remain in the doldrums, dragged down by the misery of Gaza. A recent opinion poll published by An Najah National University in Nablus found that while 67% of Palestinians living in the West Bank and Gaza believed the prisoner deal would boost Hamas’ popularity, at the same time, only 8% said they would vote for a Hamas candidate in a presidential election — compared with 27% for a Fatah candidate. More striking, perhaps was the fact that 22% said they would not bother to vote at all, while a further 20% were undecided. So Hamas has plenty of incentive to try and regain the support that saw it win the 2006 legislative election in the West Bank and Gaza.

And the changing regional situation, in which Hamas may lose its sanctuary in Syria, makes the organization more inclined to please such potential future hosts as Egypt, Turkey and Qatar, all of whom see themselves as mediating a credible peace independent of the failed U.S. effort rather than as joining a “resistance front” with Iran and Syria.

The afterglow of the prisoner release will fade soon enough, which is why Hamas’ priority now is to improve the quality of life in Gaza. Currently, it’s struggling even to pay salaries there, with Iranian financial support having been withdrawn over Hamas’ refusal to condemn the Syrian rebellion. Other sources of funding may well be found, but Hamas’ priority going forward will be to ease and end the Israeli blockade of Gaza — an issue reportedly addressed in the prisoner exchange deal.

The Wall Street Journal reports that in the course of the Shalit talks, Netanyahu had agreed to allow the reconstruction of Gaza, adding that the Israeli envoy to the talks had spoken of the Prime Minister’s desire to see an economic boom in Gaza. The Journal quoted government officials admitting that the Israeli government planned to follow a policy of “growing openness” towards Gaza.

“Economic peace” in Gaza, then?

Despite its fundamental antagonism for Israel, Hamas’ political fortunes may depend on its ability to secure the well-being of Gazans, and that certainly creates an incentive for maintaining its cease-fire with Israel. Egypt, which took the lead in mediating the Shalit deal, also benefits from at once easing conditions in Gaza and also demonstrating its ability to maintain security.

And for Israel, allowing Hamas to rebuild Gaza carries little immediate downside, but could help reverse its isolation by addressing longstanding demands of Turkey and Qatar for an end to the blockade. And, if allowing Hamas to make gains weakens President Abbas — well, the Israelis weren’t planning on doing a deal with him, anyway, and his U.N. strategy has created diplomatic problems for Netanyahu.

Israel has a long-established tradition of playing rivals off against one another, dealing with the one deemed most challenging at any moment: In the late ’80s, it was actually Israeli policy to allow Hamas to emerge as a challenger to Yasser Arafat’s Fatah in the West Bank and Gaza. During the ’90s, Israel repeatedly between a focus on negotiating with the Palestinians and on negotiating with Syria, using each option as leverage against the other. And there was even a period after his 1996 election as Prime Minister during which Netanyahu reached out discreetly to Iran in the hope of improving relations.

So, cooperation between Hamas and Israel on easing conditions in Gaza is not a dance of peace, but rather of circumstance. Neither side may have much faith in Abbas and the peace process, but the deeper reality of the occupation will surely have them stomping on one another’s feet — or worse — soon enough. Neither partner has any illusions about the other. Nor can the Gaza situation be considered in isolation: Hamas, remember, is a West Bank organization as well as a Gaza one. Also, the prisoner exchange could spur Abbas to act on his vow to to raise economic pressure and non-violent protest action for an end to the occupation — as Palestinian civil society groups have been doing for some time. Indeed, the strongest impetus coming from ordinary Palestinians, right now, is for Hamas and Abbas to put aside their differences and create a unity government to forge a common strategy to end the occupation. If they do, neither Palestinian faction is likely to be dancing with Netanyahu for very long.

Tony Karon is a senior editor at TIME, where he has covered international conflicts in the Middle East, Asia, and the Balkans since 1997. A native of South Africa, he now resides with his family in Brooklyn, New York.